Horizon Air's decision to reduce passenger capacity could ripple down to the Medford airport in the months ahead.

Seattle-based Alaska Air Group said in a Securities and Exchange Commission filing last week that Horizon's seat-mile capacity will decline to 3.78 billion in 2008 from 3.98 billion available seat miles in 2007. Available seat miles is the measure of seat miles available for purchase on an airline.

The move could jeopardize the Jackson County-operated airport's string of 19-straight record months of passenger activity. Through March, passenger counts are up 5.8 percent to 139,300 over 2007. Horizon accounted for nearly 40 percent of last month's 50,420 travelers passing through the gates. A total of 647,471 travelers passed through the airport's gates in 2007.

"If fuel costs stay up, fares go up and seats go down, our string of records won't make it through the year," conceded Airport Director Bern Case. "It's not looking good out there. Some of the airlines are talking about parking aircraft and that's not good."

A total of 54 commercial flights — counting arrivals and departures — occur daily at the airport, down from 60 a year ago and 58 two years ago. Horizon has 18 total arrivals and departures at the moment compared to 24 a year ago, but is flying larger aircraft.

Horizon has announced it will retire some less efficient (see correction below) planes and make other adjustments to its fleet within the next two years. The change will leave Horizon with a fleet of at least 48 Bombardier Q400s — compared with a present total fleet of 65, a number that includes Q200s and regional jets. Horizon flies the 70-passenger prop-jets to Los Angeles and Seattle from Medford. The 48 Bombardier Q400s alone would represent about 2.96 billion available seat miles. The Q400s are more efficient, Case said, than either Q200s or Canadair Regional Jets, both of which carry 50 passengers.

Case said he has yet to hear of any changes by St. George, Utah-based SkyWest Airlines, which handles Delta Connection and United Express flights to the Rogue Valley. Together, SkyWest accounts for more than half of the local passenger service.

"I think April may be a record month," Case said. "But if things keep getting worse, one of these months, it's going to bite us. Some fares need to go up because airlines can't keep losing money. But if the fares go up too much people quit flying. It's a Catch-22. There's a fine line to balance."

While most airlines have been reporting losses for the first quarter because of fuel expenses, Allegiant Air, a subsidiary of Las Vegas-based Allegiant Travel Co., announced a $9.672 million quarterly profit on Tuesday. Even though it fell short of last year's first-quarter $9.747 million figure, Wall Street responded euphorically, driving up Allegiant Travel shares 36.6 percent to $28.41. Allegiant began service between Medford and Las Vegas last spring.

"Allegiant has been in expansion mode and bought additional jets," Case said. "They're pretty effective. It's a niche carrier — they plan well, keep expenses down, itemize costs and do a variety of things right. I think they'll be OK."

It would take another year of record months to improve on the airport's mark of 27 consecutive record months earlier this decade.

"The (federal) government and everybody else is looking at something that can be done," Case said. "I don't think the bottom will drop out, but our streak will stop soon if nothing happens. Then we'll start another one somewhere down the line."

Reach reporter Greg Stiles at 776-4463 or e-mail business@mailtribune.com.

Correction: The original versions of this story's headline, photo caption and text included incorrect references to the reasons for the change in the fleet. This version has been corrected.